A living wage for real, living people

By NICK MEYERS

In November, Arizonans will have an opportunity to vote on the first minimum wage initiative since 2006.

Proposition 206 will increase the wage from $8.05 to $10 starting on New Year’s Day, to $10.50 a year after that, to $11 a year after that and to $12 in 2020.

Minimum wage initiatives in Seattle, San Francisco and New York have graciously provided a Petri dish to examine the effects of minimum wage increases on what many call a “living wage.”

The verdict? Not much has changed.

That’s right, fire didn’t fall from the sky and land on every mom n’ pop shop trying to put kids through college. Thousands didn’t lose their jobs, resulting in unprecedented unemployment. Prices didn’t skyrocket, driving poor people out of the market for basic goods.

In Seattle’s case, the rate of employment tripled that of the national average after the city voted to raise the minimum wage in 2014.

A recent study from the University of Washington failed to “find compelling evidence that the minimum wage has caused significant increases in business failure rates.” It explicitly states that any closures were far dominated by business openings.

New York only voted to raise its minimum wage earlier this year, but economic analysts are already chomping at the chance to predict how it will affect the nation’s largest city.

A recent study out of UC-Berkeley speculates the boost in wages will only raise payroll costs by 3.2 percent across the entire city over the next six years. Businesses can absorb this cost by increasing prices .14 percent per year.

It also estimates a .04 percent increase in employment, which would amount to 3,200 jobs by 2021.

The same group concluded a Santa Clara County initiative would increase payroll costs by 1 percent and could account for the cost with a .2 percent increase in prices by 2019.

We’re talking about pennies, here. Pennies to the consumer and thousands in annual earnings to minimum-wage workers. Somehow, the doomsday scenario just isn’t adding up.

But enough of the data.

When it comes down to it, responsibility lies with business owners. When we envision our perfect economy, do we enjoy seeing mega chains and international brands take over our consumption? Not usually.

We like the idea of going to Sally’s hardware shop and Bill’s flower stand, chatting about the latest ball game, asking about the kids and giving our hard-earned cash to people we don’t mind sharing it with.

Aztec Press cartoon by Coral Yankey

Aztec Press cartoon by Coral Yankey

These small businesses are indeed the backbone of a healthy economy and it isn’t the fault of their employees that they struggle.

It’s the mega chains that offer prices too low to compete with and use cost-benefit analyses that tell them how little they can get away with paying their employees.

The medicine for this sickness is boosting those at the very bottom of our economic ladder. Help them reinvest in their immediate markets.

The goal is to get a majority of Americans to a place where they can start saving money. They’ll put it in a bank, where Sally and Bill can apply for a business loan and become providers in our community.

This isn’t an argument won in Economics 101. The real-world examples speak for themselves and the important thing about the real-world examples is they involve real people with real lives.

 Nick Meyers is a former Aztec Press editor who now attends the University of Arizona, where he studies Journalism and Philosophy, Politics, Economics and Law, or PPEL. He actually thinks the minimum wage is a silly argument because robots will end up taking your job.

Online hyperlinks:

UW Study: http://evans.uw.edu/sites/default/files/MinWageReport-July2016_Final.pdf

Berkeley, NY: http://www.irle.berkeley.edu/cwed/briefs/2016-01.pdf

Berkeley, SF: http://irle.berkeley.edu/cwed/briefs/2016-03.html

Filed Under: InsightOpinion

Tags:

About the Author:

RSSComments (0)

Trackback URL

Leave a Reply